Shares of Kingfisher Airlines,SpiceJet and Jet Airways today soared up to 8 per cent on hopes that the government may soon take a decision on allowing foreign airlines to buy up to 49 per cent stake in cash-starved Indian carriers.
Kingfisher Airlines settled 7.88 per cent higher at Rs 10.81,while SpiceJet rose by 4.39 per cent to close at Rs 34.50 on the BSE.
Jet Airways shares gained 1.97 per cent to Rs 368.35.
Rally in the broader market also supported the rise in these stocks. The BSE benchmark Sensex ended 443.11 points higher at 18,464.27.
“Aviation stocks rallied on hopes of green signal to hike in FDI cap,” Sanjeev Zarbade,VP – Private Client Group Research,Kotak Securities said.
The Cabinet Committee on Economic Affairs (CCEA) is likely to take up the matter this evening.
At present,India allows foreign investors,not related to airline business,to buy up to 49 per cent stake in domestic airlines,but foreign carriers are not permitted to
invest in them.
Allowing foreign airlines to buy stake in domestic carriers is expected to benefit Kingfisher Airlines,which has a debt of over Rs 7,000 crore.